Friday, June 26, 2026

AI benefits capital owners more than workers

A recent study shows the benefits of AI are not evenly distributed, with workers, particularly those in high- and medium-skill occupations, experience declining income shares

AI is reducing labour’s share of total income, new research from Vienna University of Economics and Business (WU Wien) has found. In a study of European regions, Klaus Prettner, Professor of Macroeconomics at WU Wien, and his fellow researchers found that with every doubling of regional AI innovation, the share of income going to workers declines by between 0.5% and 1.6%.

Overall, observed levels of AI innovation can explain a reduction in workers’ share of income of up to 0.31 percentage points since 2000. The effect is mainly driven by worsening wage and employment conditions for high-skill labour, and less so by wage compression for medium- and low-skill labour. 

Workers worse off
The results of the study show that the benefits of AI are not evenly distributed, with the gains going disproportionately to capital owners, while workers, particularly those in high- and medium-skill occupations, experience declining income shares.

“This study challenges the wide-held assumption that AI benefits skilled workers the most”, says Professor Prettner.” Instead, it reveals that AI-driven automation often substitutes for cognitive tasks typically performed by medium- and high-skill workers, reducing their wage growth and their job security. By contrast, low-skill workers, though facing lower wages, may see modest gains in employment due to demand for roles that are difficult to substitute by AI systems.”

The authors note that without policy intervention, technological progress could further entrench regional and social divides, deepening inequality across Europe.

Find out more
The peer reviewed version of the study appeared in the European Economic Review and can be read here.

Latest

Why the best sustainability investments don’t depend on customers caring

Consumer belief is the riskiest asset on the balance...

Progress on environment stalls as pressure to deliver immediate returns mounts

New research reveals how a growing focus on short-term...

Why promising social ventures fail – and the solution emerging to prevent this

Misunderstandings between investors and founders are damaging social innovation,...

Six new books that underline the value of fresh ideas about money

These sharp new reads explore the developments and behaviours...

Subscribe To Our Content

Don't miss

Why the best sustainability investments don’t depend on customers caring

Consumer belief is the riskiest asset on the balance...

Progress on environment stalls as pressure to deliver immediate returns mounts

New research reveals how a growing focus on short-term...

Why promising social ventures fail – and the solution emerging to prevent this

Misunderstandings between investors and founders are damaging social innovation,...

Six new books that underline the value of fresh ideas about money

These sharp new reads explore the developments and behaviours...

Why your team must understand the strategic value of mistakes

The ability to learn fast from mistakes has moved...

Why the best sustainability investments don’t depend on customers caring

Consumer belief is the riskiest asset on the balance sheet, argue Goutam Challagalla and Frédéric Dalsace. The real question is whether customers would buy...

Progress on environment stalls as pressure to deliver immediate returns mounts

New research reveals how a growing focus on short-term financial performance is delaying investment in sustainability and transition planning, potentially exposing organisations to greater...

Why promising social ventures fail – and the solution emerging to prevent this

Misunderstandings between investors and founders are damaging social innovation, research suggests – but a new tool aims to build stronger bridges between them Social innovation...

LEAVE A REPLY

Please enter your comment!
Please enter your name here